The UK could face a high risk of “investment vacuum” after 2020 due to the Government’s lack of clarity on setting a decarbonisation target.
That’s the view of environmental group Greenpeace, which said billions of pounds of investment that the Energy Bill plans to bring in will depend on the carbon target being made law.
The UK Energy Research Centre (UKERC) also said the “highly public political wrangling” over energy policy and the delay in setting a target for the power sector is undermining the purpose of the Bill by creating investment uncertainty.
Professor Paul Ekins, UKERC Co-Director said: “The absence of a 2030 electricity decarbonisation target in the Bill may not persuade investors of the need for new manufacturing assets in the UK as there is a risk that these could be stranded after 2020 once the current targets have been met.
“If low-carbon investors do not feel sufficiently secure in the UK actually to build their factories and their supply chains here, they may continue to source a large proportion of low-carbon equipment from overseas. The still large-scale deployment of low-generation technologies over the next eight years could mean a missed opportunity for a UK-based supply chain due to the lack of subsequent targets.”
The trade body for suppliers, however, believe the legislation will help to attract investment in the sector.
Angela Knight CBE, Chief Executive of Energy UK said: “The huge investment will now start being made in our energy infrastructure and this will create jobs and help economic recovery. At the same time, a focus on affordability for households and for businesses of all sizes, now and during these changes, is essential.”